Dean v. Lane (In re Lane)

598 B.R. 595
CourtBankruptcy Appellate Panel of the Sixth Circuit
DecidedApril 29, 2019
DocketNo. 18-8042
StatusPublished
Cited by5 cases

This text of 598 B.R. 595 (Dean v. Lane (In re Lane)) is published on Counsel Stack Legal Research, covering Bankruptcy Appellate Panel of the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dean v. Lane (In re Lane), 598 B.R. 595 (bap6 2019).

Opinion

SCOTT W. DALES, Bankruptcy Appellate Panel Judge.

The appellants in this case, Sarah and Kevin Dean (the "Deans" or the "Appellants"), objected to the Application for Allowance of Interim Compensation and Reimbursement of Expenses ("Interim Fee Application") filed by Neil C. Bordy, on behalf of Seiller Waterman LLC, for its representation of Linda Lane ("Ms. Lane" or the "Debtor") in her chapter 13 bankruptcy case. The U.S. Bankruptcy Court for the Western District of Kentucky (the "Bankruptcy Court") overruled their objections and entered interim orders allowing fees. The Deans now appeal.1

In response, the Debtor argues that this appeal is not ripe because the Deans do not appeal from final orders, and because the Deans have not obtained leave for an interlocutory appeal.

The Panel will dismiss the appeal on jurisdictional grounds, finding that (i) the orders granting interim fees to Debtor's counsel are not final orders, and (ii) the record presents no grounds for granting leave to appeal under well-settled Sixth Circuit case law, even treating the pro se notice of appeal as a motion for leave to appeal under Federal Rule of Bankruptcy Procedure 8004(d). The Panel, therefore, does not reach the merits of the appeal.

FACTS

In June 2014, three years before filing her bankruptcy petition, Ms. Lane sold her residence to the Deans. They subsequently discovered mold in the basement and filed a civil complaint against her. The state court submitted the parties' dispute to binding arbitration, the arbitrator found for the Deans, awarding them a total of $ 126,895.57, and a Kentucky trial court entered judgment on the award against Ms. Lane.

The Deans filed their judgment lien against Ms. Lane's current residence on May 18, 2017. Largely to address this dispute, she filed a voluntary chapter 13 petition on July 14, 2017, in the Bankruptcy Court. Ms. Lane, now a bankruptcy debtor, *597simultaneously filed her proposed chapter 13 plan (the "Plan"). The Bankruptcy Court confirmed the Debtor's Plan over the Deans' objection. The Deans did not appeal the confirmation order.

Since the entry of the confirmation order, the Deans have filed several adversary proceedings and appeals to avoid its effect. As a result, the Bankruptcy Court sanctioned the Deans, awarding attorney fees to the Debtor for the Deans' contemptuous behavior. The Deans appealed from the sanction orders and those appeals, which are not addressed in today's opinion, remain pending before the Panel.2

The Deans also filed objections to the Debtor's counsel's Interim Fee Application. The Bankruptcy Court conducted a hearing on the Interim Fee Application on August 29, 2018. Following the hearing, the Bankruptcy Court entered the October 10, 2018 Order allowing some of the interim fees requested but requiring further documentation as to additional fees. After the submission of further information, the Bankruptcy Court entered the October 17, 2018 Order approving the remaining fees. The Deans timely filed a notice of appeal on October 16, 2018 (Bankr. Case No. 17-32237 ECF No. 149) and a notice of amended appeal on October 19, 2018. (Bankr. Case No. 17-32237 ECF No. 156).

DISCUSSION

A. In General

The threshold issue in any federal case is whether the court has jurisdiction. The Bankruptcy Appellate Panel has jurisdiction to review (i) final judgments, orders, and decrees arising from a bankruptcy proceeding; and (ii) interlocutory orders or decrees (only with leave of court). 28 U.S.C. § 158 (a)(1), (3). Here, the Appellants did not initially seek leave to appeal, insisting that the orders granting interim fees are final. In response to the Debtor's jurisdictional arguments, however, they now request leave to appeal under Rule 8004(d) as an alternative. The Panel first considers whether the orders under review are final orders before considering whether to grant leave to appeal.

B. Appeal as of Right (Final Orders)

To begin, the Panel refers the parties to its recent opinion in BAP Case No. 18-8005, in which the Panel held that the Deans' appeal from the order denying dismissal of the case was not a final order. In re Lane , 591 B.R. 298 (6th Cir. BAP 2018). In that opinion the Panel provided an extensive analysis of finality for the parties. That analysis, which will not be repeated here, informs today's opinion.

"[A]n order of interim fees becomes final when it is no longer subject to modification by the bankruptcy court." In re Boddy , 950 F.2d 334, 336 (6th Cir. 1991).3 The general rule that interim fees are not final, and thus not appealable, operates to avoid piecemeal appeals. Kemp, Klein, Umphrey, Endelman and May v. Veltri Metal Prod., Inc. (In re Veltri Metal Prod., Inc. ), 189 Fed. App'x 385, 387 (6th Cir. 2006). Usually, following an award of interim fees, an applicant will continue to *598provide services and incur costs, and will apply for additional fees based on such. Additionally, interim fees remain subject to re-examination, adjustment, and disgorgement. Id. (citing Specker Motor Sales Co. v. Eisen , 393 F.3d 659, 662-63 (6th Cir. 2004) ). "In essence, an interim fee award is an advance on a later-determined total fee award." Id. (citing In re Four Seas Ctr., Ltd. , 754 F.2d 1416, 1419 (9th Cir. 1985) ). Once an applicant's role in the proceedings is at an end, the appellate court may review the award. Id. (citing In re Spillane , 884 F.2d 642, 645 (1st Cir. 1989) ("The attorney for the trustee was appointed specifically to handle the appeal on the transfer of venue. When we dismissed the appeal for lack of jurisdiction, the attorney's authorized services were terminated. Thus, further applications will not be forthcoming....

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Bluebook (online)
598 B.R. 595, Counsel Stack Legal Research, https://law.counselstack.com/opinion/dean-v-lane-in-re-lane-bap6-2019.